Post
Topic
Board Bitcoin Discussion
Re: Curious - Bitcoin is still beta - why should I invest?
by
bittencoin
on 22/06/2011, 16:50:56 UTC
To answer the original question: the reason to invest in Bitcoin now instead of once it's proven itself, is because by the time it's proven itself that will have been priced in. You can't beat the market by doing what everyone else is doing---you have to invest in companies and technologies with uncertain futures.

I bought bitcoins at $0.85 because I thought they were very, very undervalued, which only meant I thought they had a much better than 1% chance of eventually being valued at $85 or more. In fact I think they have a better than 1% chance of eventually being worth $500 or more, which is more than enough upside to overcome even my level of risk aversion (which is pretty high).

Putting money into Bitcoin is not a safe move, it's an aggressive one. If you have a place for that in your portfolio, great! Buy some bitcoins and hold them. If not, great! Put your money into something else, and only buy bitcoins as you need them for purchases.

Edited to add: Ignore the "Bitcoins are not an investment" responses. Bitcoins aren't designed to be an investment vehicle. Neither is orange juice. And yet the CME is lousy with investors trading orange juice futures. Anything you can buy now and sell later is potentially an investment vehicle.

less than 5% of startups and new techs become successful enough to break even on the initial investments.  venture caps and private equities pool resources and spread their bets accordingly after multiple vetting steps, same idea as joining a mining pool.  There is a low probability that you can beat the collective wisdom of the masses, if you do, it is likely due to luck rather than skill.

You might be right about bitcoin gaining value, but what process did you use to calculate that there is a 1% chance that 1btc will worth $85 or more?  If you can put that calculation into a formula, you can patent it and license it wall street and make more money than you ever could with bitcoin.  You would also have a good chance of winning the prestigious nobel prize along with a handsome cash reward.